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The method to buy Iranian crude would-be to designate some refineries as specific consumers of Iranian crude and Park the money that is to be paid to Iran in Russia. That is to say that some refineries will try to stay outside the US financial system and its reach and start consuming Iranian crude.The payments will be made in US dollars at the instance of Iran directly to the creditor nations from whom Iran is purchasing goods like Russia, China etc.While the purchase of Iranian crude will go down a bit but simultaneously International crude prices will go up. there will be major inconvenience for everybody but the net result on Iran would be very minimal.In 1980s Saudi Arabia brought down the crude oil prices to US dollar 10 per barrel, but now the Saudi and American lobby want to keep the oil prices high. Hence Russia, Iran and Iraq will remain strong and outside USA influence & will be joined by Libya, Algeria, Venezuela, Syria, Qatar etc

NEW DELHI: India will settle payments for Iranian oil using through local banks starting in November as will make it difficult to settle trades through European banks, two industry sources said on Thursday.

In May, US President Donald Trump withdrew from a 2015 nuclear accord with Iran and ordered the renewal of US sanctions. Some sanctions took effect from August 6 while those affecting the oil and banking sectors will start from November 4.

"We are bracing up for any eventuality we have to make a payment and we don't want to default on making payments," one of the sources said.

The sources said India has selected UCO Bank and IDBI Bank for facilitating payment to Iran.

Indian refiners are currently using State Bank of India and Germany-based Europaeisch-Iranische Handelsbank AG to buy Iranian oil in euros. SBI has told refiners it would stop handling Iran payments from November.

The second source said after the United States announced it would re-impose sanctions in May, Iran has already received payments for some cargoes in rupee.

Reuters in June reported that India is looking to revive the its earlier rupee payment mechanism with Iran. During the previous sanctions regime, India adopted a barter-like scheme to buy oil from Iran while the Middle Eastern country used rupees to import goods from India.

"Previously we settled 45 per cent of our trade in rupees this time it could be 100 per cent. We have to mutually decide the number," said the first source.

India, Iran's top oil client after China, is still seeking some exemptions to the sanctions from the US though some refiners have already curtailed purchases because of insurance issuestied to the sanctions.

IDBI did not respond to requests for a comment while UCO Bank's Managing Director R K Takkar did not respond to phone calls seeking comment

Reiterating his commitment to developing a gas-based economy, Prime Minister Narendra Modi said that in the next 2-3 years, 70 per cent of the country’s population will be connected with the city gas distribution (CGD) network.

Speaking at an event organised to lay the foundation stones for multiple CGD projects awarded during the ninth round of bids, Modi said, “More than 400 districts covering 70 per cent of India’s population will have access to the CGD facility in the next 2–3 years after the completion of work under the ongoing 10th round of bidding.”

The CGD projects flagged off by Modi on Thursday are spread across 65 geographical areas (GAs) in 129 districts. These were awarded under the ninth bidding round. During the event, the Prime Minister also launched the 10th CGD Bidding Round in 50 GAs spread over 124 districts in 14 States covering 24 per cent of the country’s population.

The CGD network is in keeping with what had said in 2015 at the Urja Sangam, a global meet on hydrocarbons.

At the meet, he had called for enhancing the domestic production to reduce the energy import bill of the country by at least 10 per cent by 2022. He had also said that his government aimed to extend the reach of Piped Natural Gas (PNG) to one crore houses in the next five years.

Growing coverage

In 2014, only 66 districts were covered by the CGD network. But today, CGD projects are being implemented in 174 districts, the Prime Minister said. As per the commitment made by various entities in the ninth bidding round, around 2 crore PNG (domestic) connections and 4,600 CNG stations are expected to be installed in the next eight years across the country. This has expanded the potential coverage of the CGD network to about 50 per cent of population spread over 35 per cent of India’s geography.

In total, 86 GAs were awarded during the ninth round. Of these, two awards were challenged and therefore are sub-judice. Some fall in regions where elections are due, and hence, are under the model code of conduct. This is why the PM laid the foundation stones for projects in just 65 GAs from New Delhi. “The government is focussed on developing a gas-based economy. LNG terminals, a nationwide gas grid and a city gas distribution network are being developed to strengthen the gas infrastructure across the country,” Modi said.

Minister for Petroleum and Natural Gas, Dharmendra Pradhan said, “Presently, the share of gas in the country’s energy mix is just over 6 per cent and the aim is to reach the 15 per cent mark, while the world average is 24 per cent.”

“Efforts are not only being made to increase the use and supply of gas, but also to produce gas through agro-wastes and other products and include the same into the CGD network,” Pradhan added.

According to the Ministry, till September, 96 cities or districts in different parts of the country were covered under the CGD network development plan. About 46.5 lakh households and 32 lakh CNG vehicles are availing the benefit of clean fuel through the existing CGD networks.

With the edge proffered by its R&D centre, Indian Oil Corporation Ltd (IOC), the over-$70-billion public sector oil giant, is transitioning from an adopter to provider of indigenously developed refinery technology to the world.

Its R&D now has the capability to supply about 90 per cent of the technology needed to set up a modern greenfield refinery.

Two major developmentsMeanwhile, the company’s R&D operations are getting strengthened for the future with two major developments.

First, it is on the verge of becoming a full-fledged refinery technology player from concept to commercialisation. Second, its upcoming ₹2,300-crore world-class R&D facility, about 8 km from the existing one in Faridabad, is expected to provide a significant technological edge to IOC not just in its core refinery and lubricants segment, but also in alternative energy areas.

The oil major’s R&D centre in Faridabad has commercialised at least a dozen technologies at various plants of the company. The cumulative improvement in GRM (gross refining margin) on account of the adoption of own technologies at IOC refiners is estimated at ₹1,577 crore per year.

Its flagship INDMAX is a residue upgradation technology that maximises the LPG yield in a refinery. This technology has won many international awards, beating global refinery giants such as BP and Total.

Crossing boundaries“The time has come now for us to cross national boundaries to license our INDMAX technology. At least six overseas refineries are in advance stage of dialogue with our licensing partner to deploy INDMAX,” said SSV Ramakumar, Director - R&D, Indian Oil, in Faridabad. The R&D centre is on the verge of acquiring engineering and other related capabilities.

“We are essentially a process developer and our engineering capabilities have been led by Engineers India Ltd. However, we will be correcting this situation, acquiring and augmenting engineering capabilities also with the second R&D centre. So, we will have capabilities right from the lab to commercialisation/licensing in five years,” said Ramakumar.

Some progress has already been made. IOC can now handle at least four-five of its own refinery technologies without an engineering partner.

Second R&D unitRamakumar said the construction work for the second R&D unit — Technology Development and Deployment Centre — is being taken up. It will be a net zero power and water usage campus.

“The first phase of the second R&D unit will be operational by 2021 as per our plan,” he said.

With increased focus on alternative energy areas, the company will double its current R&D spend of ₹300 crore in the coming years. Also, the present 400-strong scientific team at the existing R&D campus will see an addition of 100 people.

“Apart from infrastructure and sophisticated equipment, human capital will be our biggest asset. We hope to have a strong 1,000-member team in both the campuses put together by 2023, said Ramakumar.

It seems the proposal came from Russia. In this case Russians may offer to set it up in exchange for equity and charging transit fee from both India and Iran. Sort of like Bakis wanted for the IPI pipeline.

It could be a three-way contract and legally binding- Iran agrees to supply India with x BTU of gas at y (currency) per unit for z (years). Russia agrees to transport this gas to India for a transit fee of a (per unit) and guaranteed supply of b (BTU) per day.

If it's a legally binding agreement and Iran or for that matter any party to the contract chooses not to honour, won't there be legal ramifications?

Manuel Quevedo's India visit coincides with swirling speculation over the future of the Venezuelan oil industry.

Venezuela’s oil minister made a surprise appearance at an energy event in India, as the embattled OPEC producer seeks closer ties with major crude customers in the face of crippling U.S. sanctions.

Manuel Quevedo said on Monday his nation wants to sell more crude to India, and that U.S. measures have resulted in a $20 billion loss to the Latin American country’s economy. He’s also the head of state producer Petroleos de Venezuela SA -- a post the career military man was appointed to in late 2017 as President Nicolas Maduro began to purge large swathes of the firm’s managerial ranks.

His arrival in India coincides with swirling speculation over the future of the Venezuelan oil industry, following a ban on its crude by the Donald Trump administration. PDVSA is seeking to retain buyers in other big consuming-countries such as China and India after American refiners halted purchases. The U.S. wants to get Maduro to cede power to an interim government led by Juan Guaido -- a lawmaker who claims he’s the country’s rightful leader.

India is set to emerge as Venezuela’s preferred customer due to the nation’s willingness to pay for crude in cash, as opposed to sales to China that are supplied via oil-for-loans agreements, according to Sushant Gupta, director of Asia-Pacific refining at Wood Mackenzie Ltd. The OPEC nation’s output could decline further if it fails to secure enough funds for upstream investments, after production halved from 2016 levels to about 1.3 million barrels a day in January.

Quevedo, who met Indian Oil Minister Dharmendra Pradhan on Monday, said his country’s production is now at 1.57 million barrels per day. Venezuela, which currently holds the OPEC presidency, has a “healthy relationship” with the Asian country, he said at the Petrotech conference near New Delhi, where he originally wasn’t on the list of attendees.

“I have met the Indian oil minister, we are going to meet again,” Quevedo said. “We have a good relationship with India and we want to continue this relationship.”

Reliance Industries Ltd., an Indian refiner that operates the world’s biggest processing complex, is taking a parcel of Venezuelan synthetic oil Hamaca that was originally scheduled for delivery to a Lyondell Basell Industries NV plant in the U.S., according to person with knowledge of situation and shipping reports compiled by Bloomberg. The last time India got the grade was in April 2018.

Oil Tankers

Venezuela will need to make a lot more such sales to sustain its oil industry. The U.S. sanctions have sliced its oil exports to a 10-month low. Last year, the nation loaded one vessel a day for U.S. refiners. After the American restrictions were imposed on Jan. 28, only one tanker has loaded over a 10-day period. That has turned oil ships into floating storage facilities.

There are more than 8 million barrels of Venezuelan crude idling all over the Gulf of Mexico in an area that stretches from U.S. coast to the Yucatan Peninsula in Mexico, according to cargo-tracking and market intelligence company Kpler.

Guaido, the head of Venezuela’s National Assembly, is trying to wrest ownership of PDVSA’s Houston based unit, Citgo Petroleum, away from the current regime. The move forms a key part of his strategy to topple Maduro and install an interim government that would call new elections. Guaido has said he plans to name a new board of directors for the state producer and its U.S. subsidiary.

The U.S. wants to “steal Citgo from Venezuela,” Quevedo said on Monday. “Citgo is a Venezuelan-owned petroleum company. The United States is simply trying to eliminate competitors.

A month old article that has not been posted on this thread built around an interview by First Post of MD and CEO of Indian Strategic Petroleum Reserves Limited (ISPRL) which is liberally dusted with nuggets of information on our country India’s crude oil storage.

We currently have a storage capacity totalling 74-74.5 days of crude oil requirements. This is slated to rise to 86-87 days of requirement when ISPRL completes phase 2 of its plan. ISPRL built its present storage capacity at USD 17 per barrel of crude oil against global average of USD 23 per barrel:

Gail currently sends up to 75 percent of its U.S. LNG supplies back to India, Tripathi said, and sells the rest into the spot market. All the LNG will eventually be shipped to India when more gas pipelines and regasification terminals are completed, he said.

Natural gas is expected to account for 15 percent of India’s energy mix by 2030, up from the current 6.2 percent, MM Kutty, secretary of India’s Ministry of Petroleum and Natural Gas, said earlier in the week.

Re-gasified natural gas is costlier against coal based methane, most integrated units would be looking into blast furnace gas or off gas in case of petchems, for the matter of producing steam and ultimately power or use the cleaner cbm for gts. Though usage of syngas is on the up and is more suitable for eco goals and equipment life cycle.